British businesses remain hungry for nuclear

25 June 2012

The appetite of UK business leaders for new nuclear generating capacity has not diminished, despite the Fukushima accident, a poll conducted by the Institute of Directors (IoD) of its members shows. The IoD has published a report calling nuclear energy a "clean, cheap and safe" way of generating electricity.

In April 2012, shortly after the first anniversary of the Fukushima accident in Japan, a survey of 1117 IoD members found that 84% were in favour of new nuclear in Britain, down from 85% in a pre-Fukushima poll. The results suggest the accident "has had little or no effect on business enthusiasm for new nuclear," according to the IoD.

The same survey found that, on average, IoD members also thought that nuclear should account for around 30% of the UK’s electricity supply, a significant increase from its current 20% share.

"Clean, cheap and safe - words not often linked with nuclear power, but more than a year after the Fukushima disaster, they still accurately describe a vital energy source, and one that the UK must embrace."

Corin TaylorInstitute of Directors

The release of the poll results coincided with the publication by the IoD of a report making the case for nuclear energy as a "clean, cheap and safe way" to meet the UK's energy needs. The Britain's Nuclear Future report is the second report in its Infrastructure for Business series.

Exposure review

"There is no question that Fukushima was a very public disaster for the nuclear industry, although there was no loss of life," the report says. It notes that a number of countries - including Japan, Germany, Switzerland and Italy - have decided to "turn away" from nuclear power. However, it says that "globally, nuclear energy is thriving." The number of reactors under construction or planned around the world has remained about the same one year after the accident.

The IoD says that "nuclear radiation is far safer than many people imagine," while "a new tolerance of more realistic radiation exposure levels would bring large cost savings to any nuclear program, without compromising people's safety." The report states that much of the damage arising from nuclear accidents is caused by "over-zealous rules based on radiation exposure levels that are too restrictive."

Corin Taylor, senior economic adviser at the IoD and one of the authors of the new report, said: "Britain is facing an energy gap with ageing coal and nuclear stations set to be shut down in the coming years. New electricity production can take years to come online, particularly at a time when energy companies are worried about investing, so it is crucial that the government acts quickly to bridge this gap. Nuclear power is clean, cheap and safe and has to be part of the mix if we are to achieve a reliable and secure energy future."

Encouraging investment

Several measures could help to ease the obstacles for investors in new nuclear capacity, the IoD suggests. Firstly, a long-term government-backed financial indemnity would have "a major impact on lowering the cost of capital." In addition, moving to technology-neutral auctions more quickly within the UK's electricity market reform would reduce any "crowding-out" effect of high levels of renewables subsidies.

Meanwhile, former chief scientific adviser to the UK government Sir David King has warned that the country will remain dependent on foreign fossil fuels unless billions of pounds are invested in nuclear energy.

He said that without government intervention, the private sector would not deliver the huge sums needed to invest in new generating capacity to fill the energy gap, the Press Association reported. Government-led investment in major low-carbon energy infrastructure would reboot the economy following the financial crisis and de-couple it from fossil fuels, King suggested.

"I think the Treasury feels this is up to the market to deliver, but actually this isn't going to happen. Infrastructure on this scale is going to need public-private partnership with strong Treasury intervention to signal where the investment should take place," he said.